BILL REQ. #: S-0104.1
State of Washington | 61st Legislature | 2009 Regular Session |
Read first time 02/02/09. Referred to Committee on Ways & Means.
AN ACT Relating to the department of social and health services' audit program for pharmacy payments; amending RCW 74.09.200; adding a new section to chapter 74.09 RCW; and creating new sections.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 74.09.200 and 1979 ex.s. c 152 s 1 are each amended to
read as follows:
(1) The legislature finds and declares it to be in the public
interest and for the protection of the health and welfare of the
residents of the state of Washington that a proper regulatory and
inspection program be instituted in connection with the providing of
medical, dental, and other health services to recipients of public
assistance and medically indigent persons. In order to effectively
accomplish such purpose and to assure that the recipient of such
services receives such services as are paid for by the state of
Washington, the acceptance by the recipient of such services, and by
practitioners of reimbursement for performing such services, shall
authorize the secretary of the department of social and health services
or his designee, to inspect and audit all records in connection with
the providing of such services.
(2) It is the intent of the legislature that the regulatory and
inspection program authorized in this section shall include a
systematic method to gather data for program improvement.
NEW SECTION. Sec. 2 A new section is added to chapter 74.09 RCW
to read as follows:
(1) Audits under this chapter of the records of pharmacies licensed
under chapter 18.64 RCW are subject to the following:
(a) The period covered by the audit may not exceed three years from
the date a claim was submitted to the department for payment, beginning
fiscal year 2008. Beginning fiscal year 2009 the period covered may
not exceed two years from the date a claim was submitted to the
department for payment. Beginning fiscal year 2010 the covered period
may not exceed one year from the date a claim was submitted to the
department for payment. After fiscal year 2010 all claims may not
exceed one year from the date a claim was submitted to the department
unless the department has evidence of sustained payment error from
previous audit, in which case the department may look back as far as
necessary to determine the degree of payment error, except for claims
paid by medicare;
(b) Entities conducting audits pursuant to a contract with the
department must maintain an office within this state as a point of
contact for pharmacies being audited or have established hours in
Pacific time;
(c) An initial audit may not commence earlier than thirty days
prior to the date on which written notice of the audit is given to the
pharmacy. The notice must be provided to the physical location at
which the audit will be conducted and to the principal office or place
of business of the pharmacy, if different, and must include the name,
office address, and telephone number of any contractor conducting the
audit pursuant to a contract with the department. Audit findings
resulting from audit work that is commenced before the thirty-day
period may not be used in any audit findings;
(d)(i) Technical deficiencies may not be the basis for finding an
overpayment if the pharmacy can substantiate through documentation that
the services or goods were provided to the recipient and that the
technical deficiency did not adversely affect direct patient care of
the recipient, unless recoupment of the payment is specifically
mandated in state or federal law or rule or failure to recoup payment
will result in the loss of federal matching funds or other penalty
against the state; and
(ii) In response to an audit finding technical deficiencies,
including a pattern of noncompliance with technical requirements, the
department may order the pharmacy to comply with a corrective plan. If
the pharmacy fails to comply with the corrective plan, action to recoup
overpayments may be taken based on technical deficiencies;
(e) An audited prescriber may use the written records of a
hospital, physician, or other authorized pharmacy to validate the
audited pharmacy's record;
(f) Extrapolation may not be used to determine overpayment amounts
to be recovered by recoupment, offset, or otherwise, unless the
secretary determines that there is a sustained or high level of payment
error or documented technical assistance has failed to correct the
payment error;
(g) The pharmacy must have at least ninety days from the date on
which the draft audit findings were delivered to the pharmacy to
respond with additional documentation or other relevant information.
Extensions of these time periods shall be granted for good cause; and
(h) A final audit report must be delivered to the pharmacy within
one hundred eighty days after delivering a draft audit report to the
pharmacy or after the close of a dispute conference, whichever occurs
later. If extensions of time are granted to the pharmacy under (g) of
this subsection, the time period for delivery of the final audit report
shall include the additional days allowed for the extension. An audit
report delivered after the time period specified in this subsection
must be deemed to be a draft audit report.
(2) The department shall remit any overpayments, fines, and
interest recovered from pharmacy audits to the state's health services
account. The federal government's share of recovered overpayments
shall be repaid immediately.
(3) This section does not apply to an audit that is based on an
investigation for fraudulent or abusive practices under RCW 74.09.210.
(4) For the purposes of this section:
(a) "Draft audit report" includes any audit which contains findings
not previously contained in an audit report delivered to the pharmacy.
(b) "Technical deficiency" means an error or omission in
documentation by a pharmacy that does not affect direct patient care
of, or receipt of services by, the recipient, but does not include:
(i) Failure to routinely obtain prior authorization of the service
if required under this chapter or rules adopted under this chapter; or
(ii) Fraud, a pattern of abusive billing or noncompliance, or a
gross or flagrant violation.
NEW SECTION. Sec. 3 The secretary of the department of social
and health services may adopt rules as necessary to implement this act.
NEW SECTION. Sec. 4 Section 2 of this act applies retroactively
to audits commenced by the department of social and health services
under chapter 74.09 RCW on or after April 1, 2010.
NEW SECTION. Sec. 5 If any part of this act is found to be in
conflict with federal requirements that are a prescribed condition to
the allocation of federal funds to the state, the conflicting part of
this act is inoperative solely to the extent of the conflict and with
respect to the agencies directly affected, and this finding does not
affect the operation of the remainder of this act in its application to
the agencies concerned. Rules adopted under this act must meet federal
requirements that are a necessary condition to the receipt of federal
funds by the state.